What is leasehold ownership

Renting a property from a freeholder is leasehold ownership. This means that you rent an absolute owner’s property for a certain period of time. You will agree about the time with the owner of the property when you are signing a lease. There are many issues that you might face when you are renting a property such as facing the ground rent scandal that has got so many people stuck with their agreements. That's why it is very important for you to properly understand what you are signing up for and what the freeholder demands. You have to understand the rent of not only the first few months but you need to make sure how much rent you have to pay in ten years time. People who didn't make sure of understanding the agreement are the ones you are having trouble with ground rent since they found out about the condition in which they have to pay double the rent after a decade.

Advantages
  • Less expensive
  • Less responsibility for repairs
  • Possibility of buying the freehold share
What to consider

The first thing you need to consider is the amount of time you will have to live in the house. If you are renting the house from a freeholder then you can discuss the years on your own. For example, if you agree to rent the property for 100 years then you will have 100 years to live there. In some cases when you buy a leasehold share from another leaseholder you have to know that the time doesn't start from the beginning. For example, if they have rented the house for 100 years and they have lived in it for 20 years then you will have 80 years to live there.

Another issue that you need to consider to avoid facing the ground rent scandal, is to pay attention to how much the rent is. You have to consider not only the rent of the time you buy the leasehold but to consider how much the rent will be until the end of your lease.